Railroad Commission to Hear Comments Nov. 20 on Inactive Well Rules

The Railroad Commission of Texas will take verbal comments at 10 a.m. Friday, Nov. 20, on proposed amendments that would carry out Senate Bill 1150 by creating a new class of long-idle wells and four ways an operator could seek a plugging extension. In a Nov. 6 announcement, the Commission said the hybrid hearing will cover proposed changes to 16 Texas Administrative Code §§3.15 and 3.58, the inactive-well and operator-report rules intended to implement SB 1150 from the 89th Legislature's 2025 regular session.

People may attend in Room 1.111 of the William B. Travis Building at the Commission's Austin headquarters, or online via Zoom. In-person speakers will go first, then remote speakers, and the hearing will be recorded. In-room speakers may register upon arrival. Zoom speakers "must register by 5 p.m. on November 19" by emailing [email protected] a request to speak, plus name, title, affiliation, email address, and daytime telephone number. The Oct. 6 proposal, issued and filed that day, said written comments would be accepted until 5 p.m. Friday, Nov. 13, 2026. That deadline has already passed. This report does not treat Nov. 20 as a reopened mail-in comment period. The Commission has also said it plans to restore standing public comment at its December meeting, a separate process from this hearing.

The proposal would define a "15/25 well" as "an inactive land well that has been inactive for more than 15 years and was completed more than 25 years ago." The Commission's preamble describes SB 1150 as amending Texas Natural Resources Code §89.023 to require operators to plug those wells unless the Commission grants a plugging extension. This report relies on that official description of the bill and the proposed rule text, not on the statutes website.

Proposed new §3.15(h) would limit 15/25 plugging extensions to land wells, not bay or offshore wells, make an approved extension valid for one year and renewable concurrently with the operator's organization report, and require documentation identifying nonoperators. The four application paths are a written request for a Commission order on restoration history; a written request for an order on financial hardship, including sworn CPA-certified financial statements for at least the three prior fiscal years; a compliance plan committing to plug the well or bring it into production or operation as an injection well or other operation by Sept. 1, 2042; or an individual performance bond "in an amount that is not less than the full cost calculation for plugging the inactive well."

The proposed approval tests are specific. For a history-based extension, the draft rule text — not the shorter preamble summary — would treat an operator with no more than 10 inactive wells as having a satisfactory history if the operator "has restored one well to active operation in the preceding year," and an operator with more than 10 inactive wells if it "has restored the equivalent of at least 10 percent of its total inactive well population to active operation, in the preceding year." A hardship extension would be warranted if listed financial comparisons are negative, or if paying one-fifteenth of the full plugging-cost calculation for all of the operator's 15/25 wells would cause bankruptcy relief or a default on one or more of the operator's material debt obligations. A compliance plan would have to set a yearly minimum of not less than the operator's total 15/25 wells divided by the years remaining until Sept. 1, 2042. At the approval stage, a bond would have to be "in an amount equal to the full cost calculation," run with the well regardless of a change in operator, and be issued by a third-party bank authorized to do business in Texas. An incomplete application would have to be cured within 90 days.

The Commission "may deny" an extension that is not warranted and "shall deny" in listed circumstances, including a well that "poses potential hazards to health and safety of the public or the environment," certain false-filing penalties, hardship caused by the operator's own fault or negligence, a bad-faith departure from a prior compliance plan, or a bond not issued by a qualifying bank. A denied operator would have 30 days from the denial letter to request a hearing and would bear "the burden of proof." The same draft would lower, from 25 years to 15 years, the well age at which an operator must run a fluid-level or hydraulic-pressure test. For those wells, the operator would have to perform either a fluid-level test once every 12 months or a hydraulic-pressure test once every five years, and would have to obtain Commission approval of the results annually. Proposed §3.58(a)(5) would require a Form P-4 signed by a designated officer or agent for each operator, plus a jointly signed affirmation that the well is in compliance, that "the transfer was a business practice performed in good faith," and that the new operator will ensure continued compliance. An extension granted on restoration history or financial hardship "is not transferrable to another operator."

David Lindley, the Oil and Gas Division director, wrote that when the proposal was issued, "no funds have been appropriated from the General Revenue Fund to the Commission to implement SB 1150." Citing a fiscal analysis given to the 89th Legislature, he estimated additional Commission costs of $6,036,855 in year 1 after the effective date, $4,882,756 in year 2, $14,884,216 in year 3, $10,980,356 in year 4, and $10,541,996 in year 5, including a need to "hire and retain 86 full-time employees." In a later government-growth paragraph, the same proposal states that during the first five years the amendments would be in effect, they would not "create or eliminate any employee positions" or "require an increase or decrease in future legislative appropriations." This report records both statements as they appear. Lindley also determined that the amendments would impose "no additional economic costs for persons required to comply," because the new extension paths "are options available to the operator" and "an operator's duty to plug inactive wells has not changed because of these amendments." That is the Commission's finding, not an independent cost study. The Oct. 6 filing is a proposal, not an adopted rule, and it does not count how many Texas wells would meet the 15/25 definition. "Moreover it is required in stewards, that a man be found faithful" (1 Corinthians 4:2).